Dow Chemical and Shintech agree to VCM supply contract

With this new contract, the two companies will continue their partnership for over half a century

31-Jan-2008

Shintech Inc., a U.S. based 100% owned subsidiary of Shin-Etsu Chemical Co., Ltd., and The Dow Chemical Company have agreed to a new long-term VCM (vinyl chloride monomer) supply contract. With this new contract, Shintech and Dow have renewed their ties in an unprecedented partnership that will span over half a century.

The relationship between Dow and Shin-Etsu Chemical dates back to 1969, when Shin-Etsu Chemical began manufacturing PVC (polyvinyl chloride) in Nicaragua and procured VCM from Dow, the raw material it needed to make PVC. A few years later, Shin-Etsu Chemical established Shintech in the U.S. to manufacture PVC. Since 1974, when Shintech began its operations, Shintech has been purchasing most of the VCM it required from Dow based on long-term contracts.

Shintech began its PVC business with an annual production capacity of 100,000 tons. Over the years, in the highly competitive U.S. PVC markets, it accurately assessed market trends and pressed ahead with more than ten large-scale capacity expansions. During that time, it consistently maintained full production and full sales, and presently its production capacity of its plants in Texas and Louisiana has expanded 20 times to an annual total of 2 million tons.

As part of its strategy to meet the strong future growth in global PVC demand, Shintech is working to establish the best possible means of acquiring raw materials. The plans announced last year and the renewal of a long-term contract with Dow both exemplify Shintech's commitment to growth in PVC. With PVC plants integrated from salt to resin, such as the plant currently under construction in the State of Louisiana, it will be possible for Shintech to freely increase its supply of raw materials, as requirements grow. By fully utilizing the advantage of its diversified supply sources of raw materials, Shintech will continue its preeminent position in North America and the global PVC markets.

https://www.chemeurope.com/en/news/77225/dow-chemical-and-shintech-agree-to-vcm-supply-contract.html